The major markets across the Asia-Pacific region slipped on Monday, erasing part of the gains made in the past few trading sessions, as fresh concerns about the stability of the banking sector resurfaced after U.S Treasury Secretary stated that big banks might need much more assistance than anticipated. Officials of the major banks stated that they had experienced tougher conditions during March after reporting better-than-expected results in the first two months of 2009.
Automobile stocks declined after the U.S. government stated that bankruptcy might be the best solution for troubled automakers in the country, including General Motors, whose CEO Wagoner has been forced to quit the job. Resource stocks fell after the price of commodities declined on concerns that the U.S. plan for reviving the financial sector and unclog the credit markets might get delayed.
On Friday, the Dow closed down 148.38 points or 1.9% at 7,776.18, the Nasdaq closed down 41.80 points or 2.6% percent at 1,545.20 and the S&P 500 closed down 16.92 points or 2% at 816.
In Asian trading, crude oil is currently down $0.93 at $51.45 a barrel, in electronic trading. Light sweet crude for May delivery closed at $52.34 per barrel on the New York Mercantile Exchange on Friday, down $1.96 a barrel.
In Tokyo, the benchmark Nikkei 225 Index lost 4.5% or 390.89 to close at 8,236 and the broader Topix Index of all First Section Issues declined 34.99 points, or 4.2% to close at 790.
On the economic front on Monday, industrial output in Japan plummeted by 9.4% in February compared to the previous month, the Ministry of Economy, Trade and Industry said. That was slightly worse than forecasts that called for a decline of 9.0% following the 10.2% decline in January. On an annual basis, industrial output dropped 38.4% compared to forecasts of a 38.1% decline after the 31.0% retreat in the previous month.
Real estate stocks declined after condominium developer Azel Corp. said Monday that it has decided to file for bankruptcy protection, with liabilities totaling 44.2 billion yen. The company has been severely hit by delays in payments of proceeds from sales of its fixed assets as well as the increasing reluctance to lend among financial institutions. Following the news, Mitsui Fudosan fell 9.16% and Mitsubishi Estate Co. is lost 9.00%.
Banking stocks slumped after Goldman Sachs advised investors to sell the stock of Mitsubishi UFJ Financial. The shares of the country's No.1 banker declined 7.00%. Other financials also declined sharply. Mizuho Financial lost 8.08%, Sumitomo Mitsui shed 4.69% and Resona Holdings moved downward by 4.51%. Brokerage Nomura Holdings dropped 4.90%.
Exporters also ended lower. Canon lost 3.97%, Sony fell 7.19%, and Sharp declined 5.05%. Automakers also ended weaker, Toyota decreased 3.68%. Honda Motor fell 6.69% and Mazda Motor Company lost 11.86%.
Hitachi declined 6.69% following news that it will close a Czech plasma television manufacturing plant due to falling prices and demand in the economic slowdown.
Toshiba Corp lost 8.04% after unveiling plans to take a 100% stake in its struggling liquid crystal display joint venture with Panasonic Corp.
Oil-related stocks moved downwards. Inpex decreased 4.22%, Nippon Oil lost 7.85% and Showa Shell fell 6.44%. Among trading houses, house Mitsubishi Corp. lost 4.61%, Sumitomo Corp. fell 4.79% and Itochu declined 5.44%.
In Australia, the benchmark S&P/ASX 200 index declined 1.85% or 67.9 points to close at 3,604 and the broader All Ordinaries index lost 61.40 points or 1.70% to close at 3,554.
On the economic front, the Housing Industry Association Economics Group's latest survey shows that total new-home sales in the month of February increased 3.9% on month.
Resource stocks declined after the commodity prices declined about 1% on the London Metals Exchange on Friday. Crude oil prices also declined to less than US$52 a barrel.
Index leader, BHP Billiton declined 4.53%, and scrap metal recycler SIMS Metal Management fell 7.60%. However, Rio Tinto edged up 0.07%.
Oil stocks declined following a sharp drop in crude oil prices. Woodside Petroleum lost 4.63%, Santos fell 4.12% and Oil Search dropped 2.12%.
Gold related stocks ended mixed following a drop in bullion prices in the international market. Newcrest Mining lost 4.14% and Sino Gold fell 3.13%. Lihir Gold, however, remained unchanged from previous close.
Financial stocks declined, partly due to profit taking after recent rally, and partly on concerns about the stability of the global financial sector. Commonwealth Bank of Australia fell 1.43%, ANZ Banking Group lost 4.59%, National Australia Bank declined 1.90% and investment bank Macquarie Group moved downwards by 2.13%. On the other hand, Westpac gained 0.31%.
Retail stocks ended mixed. David Jones advanced 1.68%, while Woolworths lost 1.14%, and Coles' owner Wesfarmers declined 2.08%.
In Hong Kong , the benchmark Hang Seng Index in Hong Kong declined 4.70%, or 663.17 points, to close at 13,456. Almost all the stocks, except six, ended in negative territory as investors resorted to profit taking after a recent rally. ,Financials and resources were the major losers.
Among resource stocks, Aluminum Corporation of China, or Chalco, fell 11.97%, CNOOC lost 6.24%, and Petrochina declined 6.17%. CHALCO reported a sharp 99% drop in net profit available to equity shareholders for 2008, while revenues declined 9.94% year-over-year
Financial stocks dragged the market indices down. ICBC bank decreased 6.21%, Bank of China fell 6.44% and Bank of Hong Kong moved down 3.09%. HSBC Holdings declined 2.51%, Hang Seng Bank shed 1.88%, Bank of East Asia slipped 4.12%, CCB lost 9.97% and Bank of Communications lost 7.50%.
Insurance stocks also ended weaker. While Ping An lost 7.80%, China Life fell 4.56%.
China-related stocks also ended lower. China Mercantile Holdings shed 9.81%, Sinopec Corp. lost 5.81%, China Overseas dropped 3.55%, and China Resources fell 3.29%.
Telecom stocks ended mixed. While Hutchison Whimpoa fell 7.51%, and China Mobile decreased 4.16%, Tencent Holdings managed to move up 0.35%.
In Seoul, the benchmark KOSPI Index slipped 3.24% or 40.05 points to close at 1,197.46.
The Central Bank of Korea revealed today that the current account balance for February 2009 swung to a surplus of US$3.68 billion from a revised deficit of US$1.64 billion in January 2009. The Bank attributed sharp drop in imports during the month as the primary reason for the surplus and expects to report a record surplus for March 2009 as well.
At the same time, officials in the Ministry of Strategy & Finance revealed that the national debt in the country is expected to increase to as much as 19% this year, as the Government, in an effort to bolster the economy through extra-budget measures, is planning to issue bonds to fund the extra-budget amount. The total national debt, which was at 308.3 trillion won in last year, is projected to increase to 366.9 trillion Won, or US$269.9 billion, during the current year, the officials noted.
Financials dragged down the market indices. KB Financial Group, the holding firm of Kookmin Bank, decreased 6.63%, Shinhan Financial fell 8.99% and Woori Finance moved down by 2.64%.
Automakers ended weak on concerns about the global auto industry after the US administration stated that bankruptcy might be a better option for troubled automakers. Hyundai Motor lost 3.81%, Kia Motor dropped 5.18% and Ssangyang Motor fell sharply by 10.45%.
Shipbuilders ended lower on profit taking. Hyundai Heavy Industries lost 5.71%, Daewoo Ship building fell 4.15%, and Samsung Heavy Industries dropped 5.91%. Market heavyweight Samsung Electronics declined 2.91%.
Oil related stocks moved downwards on lower crude oil prices. S-Oil fell 3.54% and SK Holdings lost 4.91%.
Technology related stocks ended mixed. While Hynix Semiconductor gained 3.33%, LG Electronics fell 2.55% and LG Display lost 4.20%.
Among the other major markets in the region, China's Shanghai Composite Index dropped 16.40 points, or 0.69% to close at 2,358, Taiwan's Weighted Index ended lower by 3.43% or 184.65 points, at 5,206, Indonesia's Jakarta Composite Index fell 2.98% or 43.65 points to 1,419, and Singapore's Strait Times Index lost 78.28 points or 4.48% to close at 1,667.
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